The AUD/USD daily chart formed a double bottom at 0.685 last week, a level reached by the pair in mid-May before rebounding to 0.727.
A double bottom is a chart pattern that consists of two pretty equal lows separated by a tiny peak that creates a 'neckline.' It often occurs near the end of a downward trend and may foreshadow a positive reversal.
The last time a double bottom happened was in December 2021, after which the AUD/USD pair rallied 10% to its peak on January 5th.
This might potentially lead to a fresh advance to the 0.727 neckline, which, if broken, would confirm a bullish trend reversal.
The governor of the Reserve Bank of Australia, Philip Lowe, stated this morning that more hikes are likely in the coming months after raising its main rate from 0.35% to 0.85% on June 7, exceeding market expectations of a smaller move.
Inflation in Australia is expected to peak at 7% by the end of the year, according to the latest RBA's projections.